tv Squawk Alley CNBC January 30, 2015 11:00am-12:01pm EST
♪ you know i got it if you want to come get it stand next to the money ♪ ♪ shake your money maker ♪ you know i got it if you want to come get it stand next to the money like hey hey hey ♪ and good friday morning. joining us nick bilton, tech columnist for "the new york times," along with eric sheridan internet interactive entertainment analyst with ubs. we'll get to you on a busy day, kayla tausche, jon fortt and i on set, watching a market that is lower, but being buoyed by thes like of as visa, amazon and apple. all-time high for apple at 119, almost $120 a share, going back to the ipo in december of 1980. >> yeah. and the word of the earnings season in tech is ecosystem i think, and apple is the standout here. they are the ones who really have this combination of retail, of software, of hardware.
even though it's high end, they built that out in places like china in such a way, and built a following in such a way, they can succeed in this market despite the currency headwinds you hear about, things that have tripped up the likes of ebay and to some extent google, although the stock is up after earnings. >> visa blowing the doors off the quarter which we talk about as more of a tangential stock to apple. one of the enablers of apple pay and one of the leaders in the mobile payment space. that's good for about 90 positive points on the dow. it's interesting to think about where the dow would be were visa not so stroj todstrong today. >> gdp, of course, a miss this morning with 2.6, mitt romney not running for president, we'll get to all of that in the course of the hour in addition to a lot of tech. to amazon, nick and eric, shares surging after the company did report $214 million in profit for the quarter that was above expectations. a lot was due to amazon prime which membership now up 53% from last year, shares on track for
their best day since april of 2012. i would love to get your thoughts on this. they're not telling us how many members are out there, the estimate about 40 million, but an impressive number and people not afraid of the price hike. >> yeah. no. obviously we saw excellent trajectory on amazon prime. we think that is a positive thing that came out of the print. as a result of that you saw stability in revenue growth this quarter and in the implied guide for q1. certainly seems some of the deseller rating revenue trends seems to have died down for the top line in amazon and the shares are responding to just a little bit profitability. i think there are questions, though, whether that profitability is sustainable or whether we're seeing a lockstep improvement going forward. that's the open debate on amazon here. >> jon, that is the debate. did they get religion on profitability or is he truly tossing investors a bone? >> what the cfo said, they're still in the process of meeting to determine what they're going to do around capital expenses for 2015 and beyond.
he threw out some language about looking to be really efficient in a lot of what they're doing. i think a lot of people latcheden to that. we also know -- latched on to that. they have the grocery business and local they want to spend to. they will spend a lot of money on content. i'm not sure based on what was said on the call to believe the efficiency side or whether this is a head fake. >> you condition believe it for one quarter. best margins in ten years. nick fillton, 5.4% for amazon's margin. is that a blip in the overall story or this is the beginning of a new thread of profitability for the company? >> well, i think it's entirely up to jeff bezoes. he pulls the levers and decides what goes where. that's apparent. last quarter was not good for them. people were saying that the company was in trouble and this year, i mean they quarter they turned around and said it was different. one thing interesting about amazon the company comes down to prime. they're looking at not the
future, but they're looking at pizza delivery essentially this thing to be delivered in 30 minutes. amazon is trying to figure out how to do that and that's going to be the future of their business for the next year as they experiment with all the delivery methods they're using now. >> interesting. although some, nick, have higher hopes for web services once they start breaking out the results next quarter. >> yeah. i completely agree with that, but i think that, you know, web services, it's almost like when you look at google with the search as their core product, amazon when it comes to their core product it's delivering these products. one of the things that we're experimenting with last year they have their own personal drivers, using ups and fedex and guys in cars and all these things because they have a lot of competition that's coming at them and i think that amazon prime going up to $99 and all these experimentations is something we're going to see a little bit more of over the next quarter. >> i think amazon breaking out web services is incredibly important, not just for amazon but for the entire industry. they are the biggest player. they are a pure play, pretty
much, that business is unlike some others like microsoft, so they're going to set the bar for the business structure of cloud going forward. >> it will be interesting to see whether the breakout is a choice. it appears at this point to be a choice, but eric, as we know, a lot of these companies, they reach a point where these businesses grow so much, they have to start disclosing it out of necessity. i believe it's a 10% revenue threshold. do you think this is a move out of necessity and at what point do you think alz will start having to break out prime which is much to the chagrin of analysts they don't break out? >> we don't think aws is yet 10% of revenue where the s.e.c. sort of forces you from a materiality standpoint to break it out. though, to be fair, we're only going to get the revenue number. not going to be able to see how profitable aws is on the operating income line. only going to get part of the picture going forward. so i still think we'll learn a little more about aws starting
next quarter. with prime that's a met trix. i don't think they're incentivized to give you prime any time soon. i think they will talk about it in qualitative terms. >> i like this so delicious, head of whole foods talking to bloomberg business week, saying amazon fresh will be amazon's waterloo. did you see that quote? >> i didn't. i think the prime numbers from this quarter are an argument against that. what amazon has been able to do with prime, is kind of do this balance between selection between speed of delivery, and price. when i go to amazon now i'm not expecting them to have the lowest price. they talk about great prices now. they don't talk about the best prices. i don't expect the best price. i expect to feel okay about it and to get it faster than i would otherwise. >> we know they have flexibility in the pricing of prime too, growth and no sensitivity there. >> to google, another incredible story the stock in the green even though earnings and revenue were as miss. the cfo saying revenue was hurt by a combination of a strong
dollar with inventory problems for the next u.s. 6 phone but the company would spend in a prudent manner and didn't rule out returning some of the company's $64 billion in cash to shareholders. cramer, eric, said the word discipline was used about four times. do you believe it? >> i do. i think there are three things investors look for to get positive on google. we think you got some of those incrementally last night. one, ad prices improving. headline number, looked like pricing might have been weaker but factor that in for fx and net advertising growth, google since net advertising in the mid to high teens. that's an impressive number given the scale of google and off the sentiment of all the hand wringing about search dying, poorly positioned mobile we've gone through over the last couple months. on margins he used discipline. i think investors to like to hear that. the capex number was better. on cash returns, we think that could be the number one thing
that could drive google longer term. you've seen other large cap tech names starting to return cash to shareholders. if google was to do that we believe the stock would trade materially higher. >> nick, do you buy it? because looking at google, i'm not sure exactly how they get discipline. i mean the hardware business, they couldn't get enough parts for the nexus 6 in a quarter where apple sold almost 75 million iphones and they've got all these other things to do, compensation was a high expense for them in this quarter. given the competition for talent these days in silicon valley and beyond, how much discipline can they have overs these sorts of things? >> i actually really worry about google. their search is down. you know, some of the moon shop products we've been hearing about for the last year, the google glasses and so on, have folded or are being reattributed to other sections of the company. but i don't understand what the future of the company is beyond, you know, some mobile, some search and so on. i mean we have driverless cars but that's not going to be
around for ten years or so. i do actually worry about what the discipline of the company is going to be looking forward. and, you know, the call yesterday, didn't make me feel much better about it. >> and it's interesting, nick, to see the comparison now being drawn between google and facebook, with facebook starting to take a bite out of google's digital ad share. those two companies have not necessarily been bedfellows in the past but facebook does seem to be encroaching on the turf of its core business. do you think it's fearful of that? >> absolutely. i mean one of the things that really scared google is when facebook brought out the graph search where you could say, you know, who are my friends that live in los angeles, that are republican and you could get that result. and, you know, a lot of people use google search to look for people and facebook knows that and so facebook can take some of that search away and put advertising against it they are going to hurt google i think in the future. >> eric, thank you so much for your time. have a good weekend. >> take care. >> eric at ubs. finally nick, keep you around to talk about twitter. the social network set to report
earnings next week. yesterday jack dorsey writes a string of tweets defending dix costolo. as for our co-founder evan williams pointed out there isn't a single person that's been thinking longer thanes costolo. he was one of our first investors, adviser, coo, creator of our revenue engine and coo who assembled team. curious timing in front of the quarter. what did you make of that. >> absolutely curious. i don't know if it means it's going to be some bad results in the quarter or if it's going to be good results or if dick may be leaving. i don't know what it means but it means something an i think that we really have to kind of -- you can try to read between the lines with the tweets. it's a little difficult. you know, twitter is under a lot of pressure next week to show they've grown their user base. they've added some new features over the past couple months with group direct messaging and video but that may not be enough for investors on tuesday. >> nick, the tweet storm was
then shared by twitter. it was promoted by the company itself. what do you think that has to say about how antsy it might feel ahead of the quarter? >> i love that tweet storm is just now, you know, a part of the language we use. you know, i definitely think it's a prelude to what's coming. i don't know, you know, there's been a lot of rumors of dick, you know, leaving this year. we really don't know. there's nothing coming out of the company that's actually saying that. but we do know that revenue is up. they're it continuing to grow their revenue. they are still having trouble growing users. still slow with some of the features that are coming out. and i really do think that, you know, jack is still on the board and i think that this could be kind of a little bit of a sprinkle of what we're going to see next week. >> yeah. nick, i mean if dick costolo were to go somewhere, there would be a lot of pressure, presumably, on jack and on ev, who had a defensive twitter a few days ago, to step up and maybe take on that. is this, perhaps, them saying
don't look at me. he's doing a great job compared to anybody. don't look at me. >> yeah. well i don't think ed wants to run the company. jack is struggling to make square profitable and hopefully bring that to an ipo. the board has talked if dick does leave they will bring in a financial guy which i think is a terrible, terrible idea, pp what that company needs is a product guy. >> don't they have one in-house in anthony nodo? >> he's a very impressive cfo. he's great on the calls. he's, you know, very forward thinking. he sometimes has trouble using the product when he accidentally sends direct messages to everyone. but putting that aside. if they -- i think dick has done an amazing job. i think jack's tweets were correct. the question is, can he take the company to the next level and if he can't, the next ceo, in my view, should be more of a steve jobs type, someone who is very
product oriented, understands what users want, not someone that's going to think about growing the revenue, growing the revenue. because eventually that has to come down. >> we're going to find out a lot more in a few days. have a good weekend. >> we are. >> see you later on. >> you too. >> let's get a check in on the markets. we told you at the top of the hours the dow was in negative territory. right now down by about 134 points, about three quarters of a percentage move to the downside. the s&p and the nasdaq have both started trading down as well. the nasdaq, despite the fact that amazon is having its best day since april of 2012 and apple is hitting an all-time high, largely this move op the back of the fact that gdp in the fourth quarter is basically cut in half from the third quarter and it was lower than many in the market had expected. carl? >> all right. when we come back after its announced spinoff of alibaba everyone has been wondering is yahoo! really a takeover target? kara swisher has answers. and she'll join us in a few moments. plus shake shack soaring after going public at the nyse this morning. do burgers belong in your
portfolio? we'll take a closer look. and the super bowl just two days away, houston texans star running back arian foster will join us to break down the big game later this hour. "squawk alley" will be right back. >> post nine is sponsored by fidelity investments. opinions. there's no shortage in this world. who do you trust? whose analysis is accurate? how do you make sense of it all? a simple, unbiased stock score consolidated from the opinions of independent analysts... is that too much to ask? nope. equity summary score, powered by starmine, will help you execute your ideas with speed and conviction. and it's only on fidelity.com. open an account and find more of the expertise you need to be a better investor. if legalzoom has your back.s, over the last 10 years we've helped one million business owners get started. visit legalzoom today for the legal help you need to start and run your business.
shack burgers. if you want to buy the crinkle fries you have to pay for those. the stock inside at post 8, pore than doubling in the debut. up right now at 49.51, a market cap of $2 billion, about 1.75 of a billion dollars. up 135%. founder danny meyer joined us in the last hour talking about the culture at his company which was founded about a decade ago compared to mcdonald's and why he wouldn't think he would consider a sale. take a listen. >> shake shack is about culture and i just don't know how you can scale culture from 63 to 35,000 overnight. every time we open a new shake shack, the management team that opens it, are stars who came from one of our other restaurants and we've been able to consistently grow shake shacks where when you walk in, it feels different. >> so -- >> we're going to grow at the
proper pace. >> shake shack's ceo randy garutti with us saying what sets his fast casual dining apart from competitors. here's what he said. >> there is certainly a trade up and certainly an arm's race for a lot of better burgers. i think what shake shack does, we put it all together. we make it a place you can take a date, you can take your mom, you can have a beer. i mean we just make it a place that is okay for every occasion. that's what makes it different, that's what people are buying into for the long term. >> unfortunately, carl, if you want to take a date there you can't make a reservation so you have to deal with whatever crowds they have. >> might have to stand or wait for a table. maybe the real estate issue will be different in other cities, we don't know. in new york it gets crowded. >> this valuation for 63 stores, maybe they can't scale from 63 to 35,000 overnight but investors are expecting them to scale fast. >> they tripled the number of
locations just two years ago. they had about 20 locations in 2012. they have 63 now. plans to grow to about 450 locations. so even though that's not mcdonald's 35,000 that is still rap pid expansion to come for shake shack. >> and almost all about new restaurants, not the existing ones as sales have slowed. same shack sales. >> when bankers were pitching this company building the s1 this past fall they were talking about a billion dollar valuation, to see it soar in the market to roughly twice that, when even then people were talking about it being highly valued, cramer says it's officially expensive. >> absolutely. what's getting less expensive, chevron this morning. you might see the dow down 159. chevron a big reason. the company announcing on the conference a few moments ago it will suspend its buyback program for 2015 amid lower oil prices. they've already said today that they're going to cut capex to about 35 billion this year, a 13% reduction as a result of low oil. stock is down 25% in a year when
the s&p has been up 2. so very rough times for chevron. >> wow. when we come back, how do you know luxury is getting out of control? well maybe when luxury car companies start making more furniture. we'll take a closer look at that. the new bentley home collection in a moment. "squawk alley" will be right back. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities.
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welcome back. our series about froth in the economy continues this morning. today we're looking to the intersection of fancy cars and coffee tables. robert frank explains back at hq. >> jon, luxury companies are splashing their names on side products from armani hotels to her mess helicopters but the luxury mash up may have reached its peak with the bently bed. the british car maker released it news line of home furniture, starts at $17,000, mattress not included. for your living room the bentley sofa for $25,000. it's got the famous bentley diamond pattern on it.
and the bentley coffee table, starting at $14,000. bentley custom made this half million dollar living room set for a home in beverly hills that recently sold for $70 million that was to mine craft creator marcus person. bugatti also getting into the super car home accessories craze. if you can't afford a $2 million bugatti, you can get the home safe, it's perfect for protecting your $115,000 bugatti watch winder which can hold your $200,000 bugatti watch. now the ultimate super car home accessory may be this. the portia tower. portia design group is creating the 60 story, $650 million condo tower in miami. it has an elevator for your car and a sky garage. so you can take your porsche or bentley to your apartment and save money on a couch by sitting in your car. there you go. carl? >> that's amazing. thinking back, porsche has been doing that for a while, right? ferrari putting their names on
consumer products. >> but it's been watches, you've got a lot of ferrari watches and hand bags or suit cases. but you've never seen this full scale where you have car companies making entire living room sets for this much money. so, you know, again, brand extensions can work but now they're spraying it op everything. that is a sign of a little topness in the luxury market. >> well said. thanks a lot. >> thanks. >> robert frank at hq. let's bring in simon hobbs. greece is a story, one of many in europe. >> absolutely. got apartments near me that do that with the cars. let's move on. lower in europe. let's get housekeeping out of the way before we get to athens. on the data, confirmation of the deflation coming through the eurozone. eurozone prices down 0.6% year on year. but actually on the plus side, we've had very strong retail sales from germany in the fourth quarter they're up an annualized rate growing as an annual rate of 6.7%.
france was okay, spain was actually very good. but obviously the -- i should mention we're closing out a month as well, let's have a look on the basis of qe from the ecb in march and actually the broad market in europe is up about 7%. the euro stocks. the german dax was up, we thought it might get to 10% but it hasn't. it's come down. a gain of 9%. against a market here for the year is in negative territory. let's get on and talk about what's happened in greece. we have head now five business days under the new radical left government. a lot of the ministers came in, being very aggressive on what they were going to do, how they were going to turn back on the previous austerity that was there and the european union has been pushing back. these are pictures from yesterday when the prime minister met with the european parliament president. said coming out of that the european parliament president that he didn't think greece was going to go it alone. they want to find common ground.
in that environment within the last hour the comments from the finance minister, not the prime minister, suggesting they wouldn't seek a bailout extension. he was meeting with lesser more talls, president of the euro group and deputy prime minister. let me put it in the context of this. this is how we think the greek compromise will work out courtesy of deutsch bank. basically you the two sides coming together. on the one hand the troika will seek -- the troika will offer to ease austerity and extend maturity of the loans. the greeks on the other hand will maintain if not increase their structural reform. we were always going to have a key date. the program expiration when the current bailout of greece and the guarantees from the european central banks expires. february 28th. it's no surprise today that finance minister should be drawing attention to that date and saying, we're not going to seek an extension after it. it was always going to be the line on the sand.
michele caruso-cabrera was pointing out will be the ecb funding of the greek banks because they are basically kept afloat by the ecb as a result of being in the program as it exists. therefore -- >> i get so tied up in all these things going on. anyway, the greek finance minister is doing a tour of european capitals at the beginning of next week. the greek parliament reforms on thursday and friday and have a conference next weekend. did you get that, jon? >> i got some of it. you know -- >> a lot of stuff. >> a lot of stuff, yeah. >> have a good weekend. >> you too. >> i'm off next week. enjoy. >> congratulations. when we come back, after yahoo! announced plans to spin off its stake in alibaba everyone started asking, is the company a it takeover target? kara swisher has answers and she's going to join us in just a moment. dow is down 134. welcome back to showdown! i'm jerry rice, here discussing the big race between the tortoise and the hare.
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themselves or somehow trade it in to a bigger company but at this point, the idea that someone could just swoop in is almost impossible. first of all, you know, it's not going to happen until the fall which is a long time and it could go on after that. the second thing, they have this big chunk of yahoo! japan which is problematic. whoever is going to take over this company would want to own a lot of yahoo! japan, a 35% stake or $7 billion. and then the other part is fixing the core business. it's a very thorny problem that marissa mayer has made a big bet that she can do alone and so there's all kinds of different thorns in the idea of picking it up like it's some easy target. >> but now that we have some valuation metrics, $40 billion for alibaba, that stake in yahoo! japan, $7 billion, now people are saying wait a second, yahoo!'s core business we suspected it was close to 0 or less than 0, why would you sell a company when your core business is being valued that low.
just doesn't seem worth it. >> listen, that's just -- sort of just numbers but not going to be that. when they spin off it will have a value. they have all the cash, an incredibly strong free cash flow. all kinds of assets that are valuable compared to other companies. and so it's not going to be valueless. right now with those with it, it is. but there will be a value for it once it spin off. >> kara, we had jason on yesterday, who you know, and he made the argument that it's over for marissa mayer within a year to a year and a half, she will be out the door, that this spinoff of alibaba shows that, you know, she doesn't have any more tricks up her sleeve. what's your take? >> jason just wrote a piece slavishly saying how fantastic she was. that's a shift. i think, you know, it's tough. she's got a tough thing. i've always been a critic of whether you can turn it around and sort of the oversized expectations she's some magical person that could do that. that said she's done a lot of
refurbishing and refixing and repainting of the company. sorry. she hasn't done the very core things that are needed which is to create an innovative product. i'm always focused op products. it's the same issue at twitter. if you have a great product there's a lot you can do and you can't really fix things along the sides. sorry. i'm sorry. and hope for the best. >> yeah. i'll give you a chance to take a sip of water or something. we should take a quick look here at chevron. which by the way art cashin attributing to the midday decline in the dow, suspending its buyback in 2015. one last question on meyer, you say that she's going to have to hunt for the smaller treasure that a lot of the names we know are out of her reach from a price standpoint. give us -- what's possible? >> well what she can't buy is things like pinterest that would change the story at yahoo!. you know, there's all kinds of small companies that are interesting. a lot of in the ad tech space. the thing is these prices are so high now that to get anything,
she's going to have to go into the billions. she's picked up a lot of interesting small companies like bright roll and flurry, but again, that's not going to change the game for them. people thought she might buy flip board but that 's a possibility for twitter. smallish companies none of which will make you stand up and go oh, my goodness. >> right. >> this is exciting. >> kara, can she get search back either through some kind of deal with microsoft that doesn't seem willing or by building it herself with the amount of capital she's got? >> she is putting a lot of money into mobile search led up by adam payne at yahoo! and he will see more responsibility i think going forward. that's a big long shot. that is sort of a moon shot for her to get the apple mobile deal from google. that said, microsoft is in there too. you know, it's, you know, that's her area of expertise. it's an area that she could possibly win in. it would be a big pr coup. i don't know how much money they'll make from it, but, you
know, we'll see. and that's what she was practically saying that on the call, sort of -- doing an ad for why we would be a great search partner for apple on the call. something she signaled she wants and she'll try to be competitive. >> let's switch over to twitter. of course earnings next week, kara, as you know, and then jack dorsey, tweeting yesterday, quote, as for dix costolo our cofunder evan williams rightly pointed out there isn't a single person who's been thinking longer about twitter than costolo. we talked to nick about what this could mean at this time. why did jack do this? >> i tried to get them all to talk on the record supporting him which was interesting. i'll write a story, want to hear what you have to say and none would go on the record saying that. they're using twitter their means of communication in lots of ways. they announce a lot of stuff through twitter. to show support for him. peter curry, an important board member of twitter, did that several weeks ago. it wasn't enough. they had one of the more
high-profile people, the founders, talking about how much they support them. i'm going to have more on this later, but i mean, i think their worry is that an activist shareholder will get if here. i've been working on a story about that, whether that's a possibility. it's a common stock, doesn't have a dual class stock. that's a problematic situation for them. >> where is your reporting leading you on that front? how likely, how soon? >> a lot of these ceos are under siege. first tim armstrong was at aol and then marisa at yahoo!. it's an interesting question. i think it all depends on next week's results and what nick was talking about, if the growth is there, the advertising is there, if they're showing a little more innovative approach to their product, i think it probably depends on that, on -- things won't happen until after that. >> we're waiting for twitter, kara, but investors are saying google is trading awfully close to where apple was trading when carl icahn got in there and stomped his feet for a buyback and a capital return. is that culturally possible at
google? do you think they would be able to be amenable to an activist? do you think that's a risk for that company after yesterday's earnings. >> that would be interesting, wouldn't it? they would not care. they have such a not care attitude. you know, i don't know. i think it's very -- they're definitely in a low. the stock is in a low. and there's some questions around, for example, the apple search deal and things like that and where they're going next and what's going on with android and the strength of apple in the last quarter with the profits of that iphone, are really quite amazing. they've got to show some momentum in things besides being cool. great car, and things like that. but i think probably that would be interesting. i hadn't thought about that. that would be interesting. >> yeah. i mean jack's tweets talk about the way the brand is perceived around the world and the fact that the bird has become a metaphor for free speech and civil discourse. >> okay. >> but doesn't talk about monetization in the tweet storm. >> a publicly traded company. i'm glad it's so nice.
they owe their allegiance mostly to shareholders and they have to think that way. so it's a great thing and they do that a lot. they get super defensive and say we're a great thing for humanity but humanity doesn't pay the bills kind of thing. i agree, it's been a great force for free speech, but that's -- they still have the pressure. they shouldn't have gone public in that regard but they have the fracture shareholders as it should be. >> kara, thanks so much. >> this week was interesting with amazon and google and next week will be just as interesting. >> that humanity line works better when you're mark zuckerberg and deliver the quarter that facebook did. >> yes. >> kara, thank you. kara swisher of re/code. want to draw your attention to the markets. dow down 139. the 10-year back below 1.67, close to the lows of the day. chevron not helping by suspending the dividend for 2015. we'll keep our eye on the broader markets. nasdaq was doing okay thanks to apple and amazon but the comp is in the red as well. when we come back, two days from the super bowl, talking to one
of the top running backs in the nfl, arian foster will join us live in a few moments. rick santelli what are you watching? >> i'm watching the yield curve and asking the question is it now time or is it too late to join the flat curve society? now, we're going to talk about there's a number of ways yield curves can flatten. we'll look at greece, at the u.s., even overnight in those two countries, you can see huge difference in how curve flat and why is it important? after the break, i'll let you know. take a deeeeep breath in... and... exhale... aflac! and a gentle wavelike motion... ahhh-ahhhhhh. liberate your spine... ahhh-ahhhhhh...aflac! and reach, toes blossoming... not that great at yoga. yeah, but when i slipped a disk he paid my claim in just four days. ahh! four days? yep. see why speed matters, at aflac.com.
coming up at the top of the hour, shake shake's ipo sizzles but are the traders ready to take a bite of this one. i'm going to try my first shake shack burger to see what all the fuss is about. i can't wait because i'm starving. so goes january, so goes the year, does that mean we're in for a rough 2015? the experts will weigh in. we go live to phoenix, cam newton gives us his take on this sunday's big game coming up in the "halftime report." back to you. >> thanks so much. let's get over to the cme group and check in with rick santelli on this friday. >> hi, carl. the flattening yield curve is now into the norma clay tour of about everything. used to be a small part of the verbiage with insiders in the financial markets. not true anymore. it's a dynamic that has caused central banks to move, it has caused ire. when you get short rates moving
up too fast flattening the yield curve, really sends a nasty message. nothing shows us more than what's going on in greece. this is just overnight. just overnight! here's greek maturities, 3s, 5s, 10s, 15s, up 1.74, net change, up 1.40, up.83 up .85. the way it's flattening goes from steeper to flatter by all rates moving higher. rates are moving higher. what that is saying is, is that you are looking at a situation that needs to be addressed because societies are funded in a short term and when rates move up, think lehman brothers, you can have a lot of money but if you can't get to it quick, if the market is going to penalize you because rates are moving up that has huge implications. let's look at the u.s. versus yesterday on 2s, 5s, 10s, 30s, down three basis points on 2s, down 8, down 9, down 9. this yield curve is flattening
but flattening in a different way. it's flattening with all rates going down. how extreme has this been? okay. let's just look at year to date it's the end of january one month. look at settlement on december 31st versus current rates on 2s we are down 19, on 5s down 47, on 10s and 30s down about 50 basis points each. the reason this is different is, because our flattening yield curve is giving us great insights as to what investors think about the fed. what do they think about the fed? not very much is going to happen. because what they are doing is, in essence, the flattening yield curve is pushing buys into the long end. by flattening it when it's going down, it's a whole lot different scenario than flattening when rates are going up. so we did have our period not long ago where the dynamic was in reverse. and the reason i bring this up is quite simple. because in the old days when you had a flattening curve potentially inverting that meant a recession is down the road. i'm not sure these means the
same thing but all the position central banks are holding but one thing i can tell you if this dynamic continues and we have 222 basis points of decent yield in 30 years against the dropping yields in europe the dynamic in 10s that closed below the 2.71 you might see another big wave. and we're already as i said down 51 basis points on the year on a 10. back to you. >> all right. thanks so much, rick santelli in chicago. it might be chevron as a stock leading the market lower but it's a sentiment in the overall markets that are coming from fourth quarter gdp. that was 2.6% in the fourth quarter much weaker than economists had expected. steve liesman joins us live in san francisco with the details. steve? >> kayla, what i'm going to give you is the flip side of what rick was talking about, the growth side. no doubt this 2.6% gdp number disappointed, the street looking for 3% plus and a sharp slowing from the 5s% of the third quarter raising the question are we now settling back into a
middle growth with no inflation scenario. let me give you the details of the number. a lot of noise in the data worth talking about here. consumer spending up a strong 4.2%. government spending down 7.5%. that was national defense. a payback from an outsized gain in the third quarter. inventory surprising to the upside. net trade to the down side. they kind of cancel each other out. the big story here is that it seems like 2.6, 2.7 might be closer to where we should be growing here. finally just a little commentary here, some people saying the data leaves the fed in the same place, solid growth but with inflation missing. edging further away from their objective. i'll be talking to john williams the fed president later today to ask about this gdp number and the outlook for fed interest rate hikes. kayla? >> thanks so much, steve liesman, in san francisco. up next, one of the nfl's top running backs is with us to break down sunday's super bowl
undrafted player in nfl history to rush for more than 6,000 yards, arian foster good to see you. >> likewise. >> you've been called a renaissance man, interesting man in the nfl, not because you're great on the field but because of the things you do off of it. one thing you're supporting is your wife's clothing line that is football theamed. >> it is. she actually came up with a -- an idea because there's a big market she found for women apparel for fashionable wear. she started wearing it to the game, just kind of made her own clothes and started wearing it to the became and the reception she got from the women in the stadium was like beyond her expectations. she's like every game, all throughout the game, where did you get those clothes? she's like i make them. they're like what. she's like i should try this out. she tried it and did it and started selling on-line and sold over $1,000 the first day. all right. i got to do this. she did it and it's really for the women, you know, apparel for fashion and also to get them
football literate. she has this short. >> you're going to learn about some football when you wear this. >> she's in the privileged position of being married to an nfl player so a lot of the women that love football don't have that knowledge. she wanted to their with women. came up with this idea for a shirt. cover 2. it shows the ski mat ticks of cover 2. the safeties in the zones, the corners in their zones. >> fashionable and educational. >> absolutely, man. she has a whole line on line. >> that's fantastic. >> -- covuclothing.com. go there and they have all 32 teams. it's a beautiful thing man. i'm proud of her. >> want to ask you about one of the big stories this week. it's one you've spoken out a lot on, as marshawn lynch, taking a lot of heat for, of course, giving the same answer, 29 times, one day, i'm just here to not get fined. you once gave the same answer 11 or 12 times, i'm here to be a good teammate.
should he have to speak to the media? is the nfl putting him in a bad position? >> i don't think he should have to speaks to the media. a lot of people -- >> that's not part of your job? >> no. everybody says it is part of your job because it's in your contract the but i don't think it should be in the contract because a lot of times you see the public outcry of the negative feedback from what players say and it's because a lot of these guys, like we grow up playing football and we're not public speakers. we didn't go to public speaking school. there's not a lot of media training that goes on. you say what you feel and you're not really used to the public outlash that you get for saying an unpopular opinion. a lot of guys are speaking their hearts and it's putting guys in a bad position if they're not ready for that. me, i don't care. i'm okay with bantering with anybody. >> yeah. >> i'm okay with that. a lot of people can't do that and i understand that. >> he's going to be a big factor in this football game. who do you like to win and why?
>> i like new england just because i feel like their defense is playing really well and seattle is playing really well too. i just have a feeling they're going to pull it off. i can't really call it. i don't care who wins though. >> our guys in new york have a few questions for you as well. >> go ahead. >> arian, jon fortt, you mentioned defense, people are fond of saying defenses win super bowls. what do you think is going to be the main snack tore here -- factor here? does richard sherman have to have a standout game or marshawn lynch, does the patriots defense have to stop him? which one do you think is a bigger deal? >> i mean it's kind of a two-sided question. i think that no matter what, whoever is going to win, is going to play the best collectively. a lot of times especially in the media we get caught up on this player and that player when, in fact, the people who usually win the super bowl are the guys who played best collectively and a lot of the times in the super bowl, it's the unsung hero the guy you never heard of that wins
it for you or plays the best and that's because everybody is selling out for each other and nobody cares who gets the credit and who does that will probably win the game. >> dave, do you want to wrap it up? >> let me ask you before we go. it's been a season dominated by scandal, one that started with domestic abuse issues and adrian peterson, these are two guys you know well, aren't just your colleagues and fellow running backs. two guys you know well. how will they come out of this and were they misunderstood by very unfortunate incidents? >> i know both of them and they're both good guys. and they made pretty bad mistakes. as a human, you know, i can attest to that. they happen to be in the public eye. i don't condone what they do but i'm very empathetic towards that. i grew up in a domestically
violent household and i understand what that can do to a kid, to a household in general, so -- but i'm empathetic towards them. people can change and i know, you know, i have room in my heart to forgive anybody that does anything to me so i wish the public would feel the same and the nfl would feel the same and wish those guys and families nothing but the best because in times of tragedy that's what we need is empathy and love. i wish that on them. >> interesting perspective. been called the most interesting man in the nfl. don't forget to check out covuclothing.com. carl, back to you guys. >> all right. guys, thank you so much. we can't wait. of course super bowl xlix this sunday on nbc. coverage begins at foon eastern time. when we come back a lot more on apple making an all-time high today. shake shack soaring in its debut. dow down about 135. we'll try to wrap up a couple thoughts in a minute.
the right direction. >> gold up by $20 but on pace for its worst week since november but that's what volatility will do to gold. >> enterprise tech names taking it on the chin today. >> google, amazon, apple, boeing, got more next week. doesn't stop here. have a good weekend. michele caruso-cabrera takes over the "half" at hq. ♪ welcome to the jungle, half time report, in for scott wapner. our starting lineup, jim lay ben thal, pete najarian, co-founder of optionmonster. christine short senior vice president of estimatize which specializes in earnings and dan greenhouse bgit chief strategist. why are we playing this music? rumble in the jungle. amazon shares are on fire as investors